Latest news with #Paschal Donohoe
Irish Times
22-07-2025
- Business
- Irish Times
State set to devote extra funds to big projects, but where is the money coming from?
When the Government publishes its key economic documents on Tuesday, the natural focus will be on where the extra investment is being targeted. A key question involves additional resources being devoted to projects in housing, water, energy and transport in the revised National Development Plan. What will this mean for other parts of the budget and where is the money going to come from? We should get some clue from the second major document, the Summer Economic Statement (SES), which looks at the outlook for the budget. Here, the key question is whether extra spending has left less room for day-to-day supports and tax reductions to be factored into the budget. The SES will give some indication of room for manoeuvre in the budget – in other words, what the package on the day will cost. The budget ministers, Paschal Donohoe and Jack Chambers , are likely to indicate that less money is available this year. READ MORE David McWilliams on how 'big incentives' to build could save Dublin city Listen | 36:51 They are also likely to repeat the assertion that there is no cost-of-living package this year. How both of these commitments survive the run-up to the actual budget remains to be seen. A key issue to watch for concerns budget overruns and whether the Government is going to take action to stop them happening this year. The Irish Fiscal Advisory Council, the budget watchdog, has said that the spending allocations for this year were flawed from day one, because they failed to build in overruns in 2024. With the council estimating overruns of €2 billion-plus this year, does the Cabinet plan to rein these in? And what does it mean for 2026? The goal of keeping spending growth to 5 per cent a year, set in 2021, was quickly consigned to the dustbin. So, what will now replace it? Or is it just a case of spending whatever cash is available every year?
Irish Times
16-07-2025
- Business
- Irish Times
State divests holdings in Israeli bonds, says Paschal Donohoe
The State has divested its holdings in Israeli bonds 'in the past number of weeks', Minister for Finance Paschal Donohoe has confirmed. He said the Irish Strategic Investment Fund (Isif) had €3.62 million invested in Israeli sovereign debt last year and 'escalating geopolitical tensions and conflict' in the Middle East posed an 'increased risk to assets with economic exposure to the region. 'And Isif's view is that following the escalation of the Israel-Iran conflict in June of 2025, the current situation carried materially greater risk.' It determined 'the risk profile of a number of sovereign bond holdings in the region were no longer within its investment parameters. READ MORE [ Some of Iran's enriched uranium survived attacks, Israeli official says Opens in new window ] 'And following this determination, Isif divested its holdings, a sovereign debt issued by Jordan, Egypt and Israel.' The National Treasury Management Agency (NTMA) manages the fund which makes commercial investments for the benefit of the Irish economy. Speaking during finance questions in the Dáil late on Tuesday night Mr Donohoe said 'ISIF has complete independence in implementing its investment strategy' through an investment committee reporting to the NTMA's Board. Sinn Féin finance spokesman Pearse Doherty said it was 'absolutely outrageous' that Isif invested in Israeli war bonds. He asked the Minister if he knew that 'Irish taxpayers' money was funding a genocide'. Mr Doherty said 'Israel doesn't hide behind this. They do not blush about this. They sell these bonds and advertise these bonds as 'support the war effort'. But we all know that it's not a war. We know it's genocide,' and 'it appears the investment increased during 2024, when it was at full tilt'. [ Gaza: More than 700 killed by Israeli army while collecting water since war began, say authorities Opens in new window ] The Minister replied that 'the key point to emphasise is that Isif made the decision to divest of these bonds, they're no longer hold them, and I understand this decision was made over the last number of weeks'. Mr Doherty said the State invested money 'and you can't wash your hands of this. You're the bloody Minister for Finance, and an organisation that falls under the remit of the department is investing in genocide, no ifs, no buts, no maybes.' Mr Donohoe said 'Isif independently decides what shares they are going to hold, what investments they're going to make, and they do so in a way that is completely independent of me'. He wanted to 'thoroughly refute any suggestion of complicity in the appalling violence that has been inflicted upon the people of Israel. I want to again make clear, my condemnation of what is happening, as the Government already has on many different occasions'. Mr Donohoe said 'these bonds are no longer owned by ISIF and they were sold'. Independent TD Catherine Connolly said she had received a parliamentary reply that Isif had €2.62 million in 2023 and 'as the genocide continued, worsened, this State invests more money in the bonds'. Mr Donohoe said 'I do not play a role in determining the investment decisions that Isif make'. These decisions are made 'independently of me', he said.
Irish Times
16-07-2025
- Business
- Irish Times
Budget Ministers given ‘sobering' warnings on EU-US trade war threat to economy
The two budget Ministers and the leaders of the Government parties received 'sobering' briefings on the implications for the Irish economy of an EU-US trade war , according to people familiar with the exchanges. The Taoiseach and the Tánaiste, as well as Minister for Finance Paschal Donohoe and Minister for Public Expenditure Jack Chambers , met at Government Buildings on Monday evening for discussions on next week's summer economic statement and the revised National Development Plan (NDP). Sources said a series of decisions on the NDP are still to be made, and it is understood a series of additional leaders' meetings, including one at the weekend, will be needed to sign off on the two plans. It is also understood that economic projections underpinning the plans may be confined to one year, given the high uncertainty of the international environment. READ MORE One source familiar with the exchanges on Monday evening said the briefings by senior officials were 'grim'. Another described the potential outlook as 'sobering', with the possibility of a full-scale trade war looming. But even if a trade deal is agreed, the Irish economy and public finances are vulnerable to several threats, the meeting was told. The deteriorating prospects for the Irish economy are informing the Government's resolve to deliver a much more cautious and restrained budget this year, starkly different from the giveaways of recent years and without any package of one-off, cost-of-living benefits. [ Budget boosts of up to €1,000 per worker dropped as Ministers seek era of restraint Opens in new window ] However, there is also a growing awareness in Government circles of the potential political costs of a more cautious budget. Yesterday in the Dáil, Sinn Féin leader Mary Lou McDonald gave notice that she intends to target the Government for the lack of a cost-of-living package. She said people 'desperately need' help. She told Taoiseach Micheál Martin: 'People are being fleeced now today, when they open their electricity or gas bill, when they get to the checkout with the weekly shop, when they go to fill the car and when they go to buy basic toiletries like toothpaste or shampoo.' Mr Martin said the Government has to be 'prudent ... We have to be cautious and careful in terms of the resources that we have. And I know everybody wants us to spend billions, but that is not open to us.' He also said that, 'while the European Union will continue to work for an agreement, it will also continue to prepare for other outcomes'. Mr Martin said a US-imposed 30 per cent tariff is 'untenable and sustainable' and would mean economic decline and job cuts. [ Trump's 30% tariffs would have 'very severe impact on economy' - Taoiseach Opens in new window ] Meanwhile, Government figures believe the ongoing uncertainty is causing companies to delay significant investment decisions in Ireland. Senior Coalition sources said they believe companies are deferring major decisions until there is more clarity. A source in the foreign direct investment sector echoed this view, citing feedback from clients, adding that they are uncertain if the sector would show net growth this year. [ Focus in Budget 2026 has to be on transforming infrastructure, Martin says Opens in new window ]
Irish Times
15-07-2025
- Business
- Irish Times
Budget boosts of up to €1,000 per person dropped as Ministers seek era of restraint
The complete elimination of one-off payments and a sharp reduction in current spending growth are likely in this year's budget, as payments that have benefited the average worker by about €1,000 each are pulled back, according to several people involved in the process These two elements, plus a significant boost to capital spending, are likely to form the basis of a restrained budget in the face of economic uncertainty. Discussions between Minister for Finance Paschal Donohoe and Minister for Public Expenditure Jack Chambers and the Taoiseach and Tánaiste continued last night at Government Buildings. They also considered the State's response to the threat of 30 per cent tariffs on EU exports to the United States. Sources insisted that the elimination of the one-off payments of recent years – in the shape of energy credits and double welfare and child benefit payments – has been agreed by Government leaders, though they also say this will entail significant political difficulty for the Coalition. Moreover, it is likely to be challenged internally as the budget approaches. READ MORE There is also wide agreement that the increases in current spending of 8 to 9 per cent in recent years will be reduced significantly, perhaps towards 5 per cent, though this will have implications for budgetary questions such as the increase in welfare rates. The policy of spending restraint is likely to be central to the summer economic statement, which is due to be published next week. The statement is usually delivered at the start of July, but has been delayed by internal wrangles and uncertain global outlook, further evidenced by US president Donald Trump's threat of tariffs over the weekend. There is also certain to be a boost to capital spending on infrastructure announced next week when the revised National Development Plan is published. Mr Chambers has been working through lists of projects with line Ministers in recent weeks and the plan is expected to mean significant additional spending on housing, water and power infrastructure. However, some of the more extravagant requests from Ministers have been denied. Could Mary Lou McDonald be about to enter the presidential race? Listen | 41:13 Coalition sources say that the spending increases on infrastructure will come at the cost of restraint in current expenditure, which will not expand at anything like the rate of recent years. The Government mood is said to have grown more pessimistic in recent months as threats to the economy and multinational sector grow. Officials have pointed to declining growth forecasts and sources involved in the process say that there is a settled view that the Republic's response must be to set a more cautious and restrained budgetary policy. However, there is also an awareness of the potential political cost of ending the cost-of-living payments while also holding down welfare increases and any tax adjustments. The Coalition has been under pressure from the Opposition in the Dáil recently on cost-of-living increases which politicians in all parties say is still a big issue for the public. Inflation has come down from close to 10 per cent in the aftermath of the pandemic and Russian invasion of Ukraine to less than 2 per cent. . Meanwhile, Mr Chambers will update the Cabinet on State spending for the first half of 2025 when it meets this morning. The end-of-June expenditure memo shows current expenditure is up 6.5 per cent compared to the first six months of 2024. Capital expenditure is up 22.5 per cent. Mr Chambers will confirm that capital investment will be stepped up in the revised National Development Plan next week.
